from the give-it-a-rest,-stew dept

There are times that I wonder if former NSA General Counsel Stewart Baker is just trolling with his various comments, because they're so frequently out of touch with reality, even though he's clearly an intelligent guy. His latest is to join in with the misguided attacks on Apple and Google making mobile encryption the default on iOS and Android devices, with an especially bizarre argument: protecting the privacy of your users is bad for business. Oh really? Specifically, Baker engages in some hysterically wrong historical revisionism concerning the rise and fall of RIM/Blackberry:

Baker said encrypting user data had been a bad business model for Blackberry, which has had to dramatically downsize its business and refocus on business customers. “Blackberry pioneered the same business model that Google and Apple are doing now - that has not ended well for Blackberry,” said Baker.

He claimed that by encrypting user data Blackberry had limited its business in countries that demand oversight of communication data, such as India and the UAE and got a bad reception in China and Russia. “They restricted their own ability to sell. We have a tendency to think that once the cyberwar is won in the US that that is the end of it - but that is the easiest war to swim.”

While it's true that some countries, like India, demanded the right to spy on Blackberry devices, the idea that this was the reason for the company's downfall is ludicrous. First of all, RIM gave in to some of those demands anyway. But, more importantly, the reason that Blackberry failed was because the company just couldn't keep up from an innovation standpoint -- and that's because early on it made the decision to focus onenforcing patents, rather than truly innovating. RIM got fat and lazy by getting an early lead and then focusing on protecting it, rather than keeping up with the market. And... one of the reasons it got that early lead was because companies were willing to buy into the Blackberry in part because of its strong encryption.

The idea that encryption was bad for business because China and Russia couldn't spy on people is not only ridiculous and silly, but it appears to be Baker supporting authoritarian states spying on its citizenry. What the hell, Stewart?

Beyond that, Baker insists that, really, the public doesn't want encryption anyway, and if people only knew what was really going on with the "bad guys," we'd all be willing to give up our privacy:

Baker said the market for absolute encryption was very small, and that few companies wanted all their employees’ data to be completely protected. “There’s a very comfortable techno-libertarian culture where you think you’re doing the right thing,” said Baker.

“But I’ve worked with these companies and as soon as they get a law enforcement request no matter how liberal or enlightened they think they are, sooner to later they find some crime that is so loathsome they will do anything to find that person and identify them so they can be punished.

Right. And that's what basic police and detective work is for. It doesn't mean that you need to weaken the security and privacy of everyone else. Anyway, let's see if Baker goes out and shorts Apple and Google's stock now that he believes encryption and protecting the privacy of their users is really so bad for business.

from the lots-of-ways-to-be-wrong-and-Typo-found-most-of-them dept

Ryan Seacrest's Typo (because it is never to be referred to simply as "Typo" in headlines or opening paragraphs), maker of physical keyboard accessories for iPhones, was sued by RIM (maker of formerly-popular Blackberry phones) for patent infringement earlier this year. The ailing phone manufacturer took issue with the keyboards made by Ryan Seacrest's Typo, which it felt veered a bit too close to "looking damn near like a Blackberry keyboard."

On Thursday, U.S. District Judge William Orrick agreed to let BlackBerry proceed with contempt of court proceedings after the Canadian phone maker showed that Typo has been selling keyboards in violation of the earlier order.

“I am very concerned with what appears to be deliberate contempt of the preliminary injunction by Typo,” wrote Orrick, pointing out that the company shipped around 15,000 keyboards despite the ban.

The court order touches on a lot of seeming wrongdoing by Seacrest's Typo, including multiple shipments being sent to Canada, the Middle East and Asia (Typo claimed these foreign sales weren't bound by the injunction) and a large sale to a reseller (4,000 keyboards to SMI Investments -- a company that Typo seems to be intertwined with) that occurred after the injunction was ordered but before it went into effect.

Seacrest's keyboard company also went out of turn by asking the court to find that its modified keyboard does not infringe on RIM's patents.

According to [Judge] Orrick, the existence of a “supposedly non-infringing design” was not relevant to the existing injunction. The judge added that Typo would have to bring a separate court proceeding to get an order related to the new designs.

Whether or not you agree that RIM's patent infringement case has merit, Typo seems to have completely botched its response. Sure, all the cool kids and their acts of civil disobedience have netted them contempt charges over the years, but blowing off a preliminary injunction in this sort of case is hardly sticking it to The Man.

As for RIM, this lawsuit may be going its way, but it doesn't really change the fact that a competitor saw a market niche and filled it. People still like physical keyboards, but they don't seem to care much for Blackberries. If RIM wasn't so stuck on the "you only get the keyboard if you buy the phone" strategy, it might have been able to capture this market before anyone else got to it, rather than just play spoiler by suing anyone veering too close to its look-and-feel.

from the innovators-vs.-litigators dept

Struggling also-ran Canadian maker of mobile phones, Blackberry (formerly, RIM), has quite a long history with patents. A decade ago, RIM actually was extremely aggressive in suing other companies for patent infringement. In fact, it can be reasonably argued that this was actually the beginning of the company's downfall. RIM had a somewhat dominant position in the early part of the 2000s, and then started suing pretty much every competitor (and lots of non-competitors) for patent infringement. In turn, that resulted in a bunch of other companies suing RIM, including the infamous case of the patent troll NTP, who eventually got $612.5 million out of RIM after a tremendously high-profile, years-long lawsuit that brought patent trolling to the attention of both the public and lawmakers. Of course, the guys behind NTP have admitted they only sued RIM after reading about its aggressive patent strategy first. But, more importantly, it seems clear that the aggressive lawsuits, both inbound and outbound, resulted in the company taking its eyes off the innovation ball, allowing basically everyone else to leapfrog way past it.

As the company has been basically falling apart, we've fully expected it to go full on patent troll. After all, that's pretty much what you expect of legacy companies who've lost in the marketplace and can no longer figure out how to innovate. Instead, they basically start to litigate against anyone and everyone -- and RIM/Blackberry already has that sort of trait in its DNA anyway.

So it's little surprise to hear that the company has launched a silly lawsuit against Typo Products, a company formed (of all things) by TV personality Ryan Seacrest and others, creating a physical keyboard that can attach to the iPhone 5. Blackberry claims the company "blatantly copied Blackberry's keyboard." But, it's a keyboard. There are only so many ways you can make it, and honestly, if Blackberry wasn't so focused on lawsuits all these years, perhaps it could have realized years ago that maybe it should have been making physical keyboards for the smartphones that the public actually seemed to want.

from the from-dominant-to-dead-in... dept

There's plenty of attention going to the news of Blackberry's awful financial performance and massive layoffs, with many people declaring the company at death's door (meaning it's likely someone will buy off the pieces sometime soonish). Just a few weeks ago, we wrote about the similar effective death of Nokia, highlighting just how much the mobile ecosystem had changed in just a few years. We showed the following chart from Asymco to make the point about just how much the market had changed, and how far Nokia had fallen in just a few years:

That same chart, obviously, applies to RIM as well. Though since RIM (which became Blackberry) had a rather different business model, it's not as noticeable when you're just looking at profit share, which that chart shows. Instead, the Washington Post shows an even more telling image, just looking at mobile OS marketshare:

The shorthand: markets change. Often in big, surprising ways. A few years back, if you looked at corporate America, it would be almost unfathomable that anyone would unseat RIM/Blackberry. It was everywhere in the corporate market. You could talk to people who referred generically to all mobile phone devices at "Blackberries." That's how ubiquitous the brand had become.

But, then, a variety of things changed. It wasn't because of any anti-trust efforts. It was because of basic competition, which resulted in a somewhat surprising change in how things worked. First, the iPhone came on the scene, and that was a really compelling device. No, it didn't have the nice keyboard, or certain features that Blackberry users loved (liked BBM), but it was really great in so many ways... so people started to want to just use that for both personal and work purposes.

But the pace of innovation in the consumer smartphone market was so rapid that employees became dissatisfied with their BlackBerrys. And eventually, the advantages of iOS and Android devices became so obvious that corporate IT departments were forced to capitulate. They began supporting iPhones and Android devices even though doing so was less convenient.

BlackBerry eventually realized that it would need to compete effectively in the consumer market if it wanted to survive. But building consumer-friendly mobile devices wasn't its engineers' strong suit. And by the time BlackBerry released a modern touchscreen phone in 2010, three years after the iPhone came on the market, it had a huge deficit to make up.

Folks who study the Innovator's Dilemma will likely recognize this as a classic case of that in action. You have a new upstart, that gets mocked and pooh poohed by the existing players. In the business world, very few people took the iPhone (or Android) seriously. After all, RIM totally dominated the market, and it was entirely top-down, with companies purchasing huge contracts. Plus, the Blackberry had so many features really focused on the business users that the iPhone felt like "a toy."

But that really is the secret to tremendously disruptive innovation. The first versions are almost always mocked as "toys." It leads the dominant player to ignore them or mock them. And then the bottom up tidal wave takes them by complete surprise. The "toys" get better at business tasks, and even if they're not as good as the Blackberry, they're good enough for most business use cases, and the pressure mounts to ignore the top down process and have companies support iPhones and Android phones. And, by the time Blackberry tries to catch up, they're way, way behind. It's the same story of disruptive innovation that has happened time and time again.

This pattern is almost undeniable. In retrospect it always looks obvious, but companies almost always miss this. They tend to think -- incorrectly -- that they can "spot" the disruptive innovations ahead of time. Or, barring that, they believe they have such a dominant position that if something appears to be disruptive, they can just copy it and "catch up" leveraging their position in the market to do so. But that's rarely the case. Almost every time, by the time they realize what's going on, it's way too late. When they finally get to the market, they're seen as also-rans, way behind the times. They're often going after a moving target. The successful early innovators have already adapted and changed and innovated some more, while the big entrants are still trying to compete with last year's model.

It's happened before and it'll happen again. It's the nature of innovation. It has nothing to do with patents (RIM's got tons of those and has used them aggressively at times -- look where that got them). It has nothing to do with antitrust issues. It has everything to do with the nature of innovation and competition.

from the but-what-about-those-angry-birds dept

Cross-posted from

New versions of the BlackBerry mobile device won’t come equipped with BrickBreaker, a simple game that for years was installed on every BlackBerry and at its peak developed a cult following among traders and Wall Street executives. Richard S. Fuld, the former Lehman Brothers chief executive, became so addicted that in 2006 he had his technology department remove the game from his device in an effort to break his habit. Nick Manning, a spokesman for BlackBerry, on Wednesday confirmed the company’s decision to remove the game from new devices. [Dealbook]

from the there-it-goes dept

Just a few weeks ago, we wrote about RIM getting hit with yet another crazy patent infringement award, after a jury sided with Mformation and told RIM to pay $147.2 million. However, as often happens in these kinds of cases, RIM then sought a judgment as a matter of law (JMOL) -- effectively a finding from the judge that, even though a jury ruled one way, it did not have enough evidence to do so. Those aren't often granted, but in this case... the judge dumped the jury verdict.

After considering motions presented by both parties, as well as the jury verdict (which was announced by RIM on July 14, 2012), the Judge determined that RIM had not infringed on Mformation's patent. In granting RIM's motion, the Judge also vacated the $147.2 million jury award, which means that RIM is not required to make any payment to Mformation.

Mformation can (and almost certainly will) appeal, though a successful appeal would just take things back to square one, meaning a new district court trial.

Stories like this are why there have been some efforts made to get juries out of patent trials...

from the impossible-doesn't-mean-what-it-used-to dept

Back in 2008, we wrote about how the Indian government was demanding that RIM let it snoop on encrypted messages from Blackberry users. RIM's response was that it was simply impossible to snoop on its enterprise customers' messages, since they set their own encryption keys. A few months later, the government claimed to have cracked RIM's encryption, though the whole claim was sketchy. In 2010, the government again demanded the right to spy on Blackberry users (raising more questions about that encryption cracking claim). RIM apparently offered up a "solution" that the Indian government rejected, because it didn't let them snoop enough (basically it allowed snooping on consumers, but not corporate accounts).

RIM recently demonstrated a solution developed by a firm called Verint that can intercept messages and emails exchanged between BlackBerry handsets, and make these encrypted communications available in a readable format to Indian security agencies, according to an exchange of communications between the Canadian company and the Indian government.

If you're a RIM Blackberry customer, and you bought into it because of the security features, now would be the point where you get pretty pissed off and start seeking alternatives. The report from the Economic Times suggests RIM did this because of the "importance" of the Indian market. RIM is clearly in trouble. Its failure to keep up on the innovation front means that the company is clearly struggling. But kowtowing to a government by allowing it to spy on users is hardly the sort of thing that's likely to get you more customers. It seems like it should do exactly the opposite.

from the live-by-the-patent,-die-by-the-patent dept

Perhaps one of the most famous patent lawsuits -- which really highlighted the whole patent troll problem -- was the case of NTP vs. RIM, which ended with RIM paying over $600 million to settle the case, even as the USPTO was rejecting NTP's patents. Since then, RIM has been involved in a number of other patent lawsuits as well, including one that it lost last week against "Mformation Technologies." RIM has been told to pay up another $147.2 million in this case.

Of course, what some people forget is that RIM brought much of this on itself. Before NTP even came on the scene, it was RIM who started suing a bunch of other companies for patent infringement, based on its broad portfolio of patents around wireless email and mobile devices. On top of all that, RIM's business is collapsing. The company is fighting for relevancy as its latest operating system has been delayed -- and there's growing evidence that even once it comes out, no one's going to care about it.

RIM can try to put a nice spin on things, but it seems clear that the company is in serious trouble. Perhaps, next time, it will focus on improving its products more than getting caught up in the patent game. Yes, many of these more recent lawsuits came from it getting sued, but there's no doubt that RIM drew a lot of attention to itself early on with its own patent lawsuits against others.

from the just-great... dept

You may recall last summer that Apple, Microsoft, EMC, RIM, Ericsson and Sony all teamed up to buy Nortel's patents for $4.5 billion. They beat out a team of Google and Intel who bid a bit less. While there was some antitrust scrutiny over the deal, it was dropped and the purchase went through. Apparently, the new owners picked off a bunch of patents to transfer to themselves... and then all (minus EMC, who, one hopes, was horrified by the plans) decided to support a massive new patent troll armed with the remaining 4,000 patents. The company is called Rockstar Consortium, and it's run by the folks who used to run Nortel's patent licensing program anyway -- but now employs people whose job it is to just find other companies to threaten:

But Widdowson is a specialist. He's one of 10 reverse-engineers working full time for a stealthy company funded by some of the biggest names in technology: Apple, Microsoft, Research In Motion, Sony, and Ericsson. Called the Rockstar Consortium, the 32-person outfit has a single-minded mission: It examines successful products, like routers and smartphones, and it tries to find proof that these products infringe on a portfolio of over 4,000 technology patents once owned by one of the world's largest telecommunications companies.

When a Rockstar engineer uncovers evidence of infringement, the company documents it, contacts the manufacturer, and demands licensing fees for the patents in question. The demand is backed by the implicit threat of a patent lawsuit in federal court. Eight of the company's staff are lawyers. In the last two months, Rockstar has started negotiations with as many as 100 potential licensees. And with control of a patent portfolio covering core wireless communications technologies such as LTE (Long Term Evolution) and 3G, there is literally no end in sight.

The article admits that Nortel got most of these patents because it wanted them for "defensive" reasons. And now look at how they're being used. Remember that the next time you hear a company promise to only use its patents defensively. There's also a ridiculous quote from Rockstar's CEO, John Veschi:

“A lot of people are still surprised to see the quality and the diversity of the IP that was in Nortel,” he says. “And the fundamental question comes back: ‘How the hell did you guys go bankrupt? Why weren’t you Google? Why weren’t you Facebook? Why weren’t you all these things, because you guys actually had the ideas for these business models before they did?’"

The real answer, of course, is because patents are meaningless. Ideas are worth nothing by themselves. Ideas only matter if you execute, and anyone who's ever actually executed on an idea will tell you that the original idea almost is never reflected in the final product. The process of going from idea to actual product is a process by which you learn that what matters is not what you thought mattered. And yet, for reasons that make no sense to anyone who has ever actually built a product, creating monopolies around the ideas only serves to create a massive tollbooth towards actual innovation. And that's what we have here -- and it's funded by Apple and Microsoft.

Once again, we see that these two large companies are using the patent system not to innovate, but to stop up and coming competitors from innovating. The patent system isn't being used to encourage innovation but to protect incumbents from an open market.

Oh, and worst of all, the reason that the antitrust effort was dropped was because Apple and Microsoft promised to license the key patents under "reasonable terms." But... Rockstar is not subject to that agreement.

But the new company — Rockstar Consortium — isn’t bound by the promises that its member companies made, according to Veschi. “We are separate,” he says. “That does not apply to us.”

That seems quite problematic, and perhaps worthwhile for the government to reopen its investigation...

from the bye-bye dept

A couple years ago, a massively struggling Kodak decided that perhaps it could cash in by suing more innovative companies for patent infringement. It filed suits against Apple and RIM for patent infringement both in the courts and using the ITC loophole. It appears that going to the ITC may have been a mistake on Kodak's part, as the administrative law judge there has said that the patent is invalid, so it doesn't even matter that some iPhones and Blackberries technically infringe. Of course, this has to hurt even more, considering that Kodak's trying to sell off its patents. If one of the key ones is found to be invalid, that can't be helpful in selling the bundle...